A hometown newspaper with a local office, local owners & lots of local news
A hometown newspaper with a local office, local owners & lots of local news
Carlton County Sheriff Kelly Lake discussed at a justice center meeting in March the idea of hiring a firm to handle a public information campaign on the sales tax referendum coming in November that would go toward the cost of building the center.
Carlton County officials didn't waste any time with the latest round of financing for the new justice center. The call for a sale of $27.5 million in bonds took only 12 days from presentation to final approval at Monday's county board meeting.
PFM, the company the county uses to organize bond sales, had earlier advised that borrowing money would cost more soon due to pressure from the Federal Reserve to raise interest rates to dampen higher inflation rates and uncertainty about how the U.S. economy would continue to perform.
Ten financial groups submitted bids to finance part of the debt for construction of the justice center, which will include new jail and district court facilities. Usually only four or five are submitted. For such a large amount of money, general obligation bonds are required. The board accepted a proposal at a true interest rate of just over 3.31 percent.
County auditor/treasurer Kevin DeVriendt said it was the right time to move.
"PFM told me they were surprised at the number of proposals submitted," DeVriendt said. "Several of the proposals came from the East Coast. The results came in with the interest rate lower and the upfront premium almost doubled compared with earlier projections."
The cost of bonds is $195,350 for services from PFM, Moody's rating firm, and the Fryberger law firm. The total interest on the 25-year bond would be $18,263,187.
Those costs will be offset by a higher-than-expected premium paid upfront by RBC Capital Markets out of New York of $2.95 million. That makes the net interest cost $15,401,111, according to DeVriendt.
Bond payments on this round of bonds sold will start in the spring of 2024. The commissioners voted 4-0 in favor of accepting the proposal with member Dick Brenner not present Monday.
The county already bonded for $10 million toward the justice center.
A request for $22.5 million in funding for the new jail complex is still working its way through the state Legislature. Sheriff Kelly Lake reported that a hearing on the bonding proposal will be held next week remotely and the county will make its pitch.
In other news
• County health and human services director Dave Lee got approval from the board to help pay for increased transportation costs for residents needing rides to health appointments. High gas prices are hurting the search for drivers. The county will help subsidize the increased costs for the time being. A bill ensuring more funding for transportation costs is working its way through the legislature and may pass this session.
• The Fond du Lac Band has requested transfer of two small parcels of land along the St. Louis River. Land commissioner Greg Bernu said one was long and narrow along the edge of the river but only as wide as a city sidewalk. The other was the size of a yard. They lie north of Carmen's Restaurant and are within reservation lands. The board gave Bernu permission to negotiate a deal for purchase of the property since state statute does not give the board permission to just transfer property without compensation unless the one making the request is a governmental body.
• Sheriff Kelly Lake received permission to hire Swim Creative of Duluth to provide public information about the justice center project and the referendum in November asking for a countywide sales tax to pay for a large portion of the project. The exact price for the campaign is not known, but with the bulk of costs in printing and postage, approval was given for a contract ranging between $24,898 and $26,290.
